Obamacare's Flaws Put Progressive Politics in Jeopardy

If the Obama administration can't quickly fix the rollout of the Affordable Care Act, not only is President Obama's second term in jeopardy. Progressivism itself is in jeopardy.

Progressivism's fundamental mission statement is that the government is essential to counterbalance free markets and can help solve social and economic problems from retirement security, to the environment, to health care. American voters are ambivalent. It's often said that a majority of voters are philosophically conservative and operationally liberal: It you ask them whether they support bigger or smaller government in the abstract they support smaller government. If you ask them whether they support specific government programs like Social Security, Medicare, disaster relief, or environmental protection, they support the specific government programs.

The danger is that if Obamacare continues to be an unforced error it will also reinforce the bias of many Americans -- amplified by 30 years of right-wing propaganda -- that government is the problem and not the solution to pressing social and economic problems and will make it difficult to sell American voters on any progressive reforms for years to come.

Moreover, Republicans could increase their majority in the House and retake the Senate in 2014, making it Obama a lame duck.

While most progressives and liberals welcomed Obamacare as the fulfillment of the hundred-year old progressive dream of providing health care as a right to all Americans, the tragic irony is that Obamacare is not really a progressive program but a fundamentally conservative one hatched by the right-wing Heritage Foundation.

Not only is it NOT government run health care, as its Republican critics dishonestly charge (except for Medicaid expansion for low-income Americans which Republican governors in nearly 30 states have turned down). It's not even government run health insurance. It's PRIVATE health insurance which is means tested for partial subsidies. In fact it looks suspiciously like the voucher system that Paul Ryan and House Republicans want to convert Medicare itself into.

But for most of the voting public -- egged on by Republican propaganda and unrefuted by the mass media -- Obamacare is a form of government run health care. Its failure to work well just confirms to them that government doesn't work well.

In fact, Obamacare is the bastard child of two incompatible strains of political philosophy. The first is the long-held progressive principal that access to basic health care should be a right and not a privilege. The second is the long-held conservative principal that the only solution to social problems is the "free market" (before conservatism abandoned any notion that solving social problems is a worthwhile goal at all) and the way to all reform is through private enterprise -- in this case private insurance with means tested partial subsidies.

Combining the two is like asking a pig to fly.

This incestuous combination is the essence of Clinton and Obama corporate neoliberalism -- not of real progressivism -- and, as the rollout of Obamacare is proving, it doesn't work, or at least doesn't work very well.

Medicare -- which is simply single-payer health insurance for everyone over 65 -- is the true progressive solution and works very well. You can sign up for it in 10 minutes. And extending it to every American from birth to death -- which is essentially the system in other advanced capitalist countries like Canada, France and Sweden that provide better health care than America at half the cost -- is the simple and elegant solution to providing health care security to all Americans.

But that would require confronting the power of the private health care industry. And confronting powerful private business interests is antithetical to Clintonism and Obamaism which has made its peace with the domination of politics by big money setting the limits of permissible reform.

To put it simply, and perhaps over-simply, on a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. This approach was a hallmark of the so-called Clintonian, 'New Democrat' movement, and the broader international movement sometimes referred to as 'the Third Way,' which often defended the use of private means for public ends... To put it more bluntly, on a widening range of issues, Obama's critics to the right say he's engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector.

[Obama and Clinton] Democrats learned never to go to war against the combined forces of corporate America. Today, whether it is on the stimulus, on health care, or any other issue, the Obama administration and the Congressional leadership go out of their way to court corporate interests, to win corporate support and to at least divide corporate opposition.

The defective roll-out of Obamacare is not simply an accident. While some of the technical flaws may eventually be remedied, fundamental problems are baked into the Rube Goldberg contraption that is the Affordable Care Act.

Take the problems with the Obamacare website that's making headlines, empowering Republicans and freaking out wobbly Democrats. As Mike Konczai has pointed out on the Next New Deal blog, it's not a function just of faulty computer programming but of the unnecessary complexity of a system that has to means test applicants based on their income and other factors and then match them to a choice of approved private insurance policies.

You can sign up for Medicare online in minutes. But signing up for Obamacare

requires substantial coordination between multiple government agencies with very different infrastructures. As the GAO notes, the data hub is to verify an applicant's Social Security number with the Social Security Administration (SSA), and to access the data from the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS) that are needed to assess the applicant's income, citizenship, and immigration status. The data hub is also expected to access information from the Veterans Health Administration (VHA), Department of Defense (DOD), Office of Personnel Management (OPM), and Peace Corps to enable exchanges to determine if an applicant is eligible for insurance coverage from other federal programs that would make them ineligible for income-based financial subsidies.

But that's not all. The website then needs to match this data from multiple government agencies with the various policy offerings of multiple private insurers with multiple offerings, each with their own computer system and rates.

You can see why this is no easy task. And obstructionism of Republican governors who have refused to set up their own exchanges has only compounded the problem.

But still, it's an unforgivable unforced error by the Obama administration that had 2 years since the ACA was passed to foresee these problems, come up with solutions, and test them before the website was rolled out to the public.

And Obama's retreat in letting people keep their current defective policies in the individual market for another year will only compound Obamacare's problems. People who currently have individual policies are relatively healthy -- Otherwise their pre-existing conditions would have prevented them from getting individual policies in the first place. These are the very people who need to be part of the risk pool of the policies sold on the exchanges. If the people who do buy policies on the exchanges are older and sicker, the premiums will go up next year. This will lead more healthy people to avoid buying Obamacare policies -- possibly even paying fines and going uninsured -- which could lead to a death spiral of rising costs leading to fewer healthy applicants leading to even higher costs.

And what about that claim that "if you like your insurance, you can keep it"? It was actually disingenuous slogan concocted by advocates of Obamacare to fend off advocates of Medicare-For-All. Before Obama's election, several polls showed majority support for Medicare-For-All. In a December, 2007 AP/Yahoopoll, 65 percent preferred a Medicare For All-type system while 64 percent preferred keeping the current system in which some people get health insurance from their employers and some have no insurance. According to a 2007 NBC News/Wall Street Journal Poll, 53 percent said they would be willing to pay higher taxes so that everyone can have health insurance, while 40 percent disagreed.

But neoliberal supporters of what became Obamacare -- who didn't want to challenge the power of the private health care industry -- argued that the public would reject Medicare-For-All because they "liked" their current health insurance and would be afraid to lose it. So they urged Obama to adopt the slogan "if you like your insurance, you can keep it" which they knew wasn't really true.

Now it's come back to bite them.

As a Medicare-For-All activist and as someone who wrote over a dozen pieces in the Huffington Post criticizing Obamacare before it was passed and exposing the behind-the-scenes deals with big PHarMa and the private hospital lobby designed to neutralize corporate opposition, it's tempting to gloat at the failures of Obamacare and say "I told you so".

But as a progressive, I have to hope and pray that the Obama administration can quickly fix the Affordable Care Act's most glaring problems in the face of steadfast Republican opposition. I'd like to think that Obamacare's failure would lead towards Medicare-For-All. More likely, it would lead back to a dog eat dog world in which millions lack health care at all. Millions of real people will suffer real harm

Even more crucially, if Obamacare can't be fixed well enough to become a modest success despite its flaws and limitations, the chances for real progressive reform may be drastically diminished for decades to come.